In April, the State Tax Equalization Board (“STEB”) revised the 2011 Philadelphia common level ratio (“CLR”) upward from 18.1% to 25.2%. This increase came after the City of Philadelphia and the School District of Philadelphia (collec-tively “Philadelphia”) objected to STEB’s prior lowering of the CLR from 32.0% to 18.1%. This change by STEB should have only a modest impact on most appeals originally filed due to the CLR rate drop.
In previous editions of this newsletter, we alerted you to the dramatic drop in Philadelphia’s 2011 common level ratio (“CLR”) from 32.0% to 18.1%. This drop in CLR resulted in the implied fair market values of properties in Philadelphia exploding, thus resulting in appeal opportunities. For instance, a property with a current assessment of $100,000, under the “old” 32% CLR, had an implied fair market value of $312,500. When the CLR dropped to 18.1%, that same property suddenly had an implied fair market value of $552,486. Therefore, the reduction in CLR from 32% to 18.1% meant that this property’s value in the eyes of Philadelphia increased 57% overnight. Not surprisingly, Philadelphia received over 2000 appeals due to the CLR rate drop.
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